[Federal Register Volume 86, Number 181 (Wednesday, September 22, 2021)]
[Notices]
[Pages 52731-52735]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-20452]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93023; File No. SR-EMERALD-2021-28]


Self-Regulatory Organizations; MIAX Emerald, LLC; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change by To 
Amend Its Fee Schedule With Respect to Open-Close Report Data

September 16, 2021.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on September 2, 2021, MIAX Emerald, LLC (``MIAX Emerald'' or 
``Exchange''), filed with the Securities and Exchange Commission 
(``Commission'') a proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is filing a proposal to amend the Exchange's Fee 
Schedule (``Fee Schedule'') to provide historical Open-Close Report 
data for free by amending the fees for the Open-Close Report to: (i) 
Respond to ad hoc requests for end-of-day data free of charge; and (ii) 
provide mid-month subscribers data for the entire month in which they 
subscribe.
    The text of the proposed rule change is available on the Exchange's 
website at http://www.miaxoptions.com/rule-filings/emerald, at MIAX's 
principal office, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

[[Page 52732]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange recently adopted a new data product for options known 
as the Open-Close Report,\3\ which the Exchange made available for 
purchase to Exchange Members \4\ and non-Members on June 1, 2021.\5\ 
The Open-Close Report is described under Exchange Rule 531(b)(1). The 
Exchange now proposes to provide historical Open-Close Report data for 
free by amending the fees for the Open-Close Report to: (i) Respond to 
ad hoc requests for end-of-day data free of charge; and (ii) provide 
mid-month subscribers data for the entire month in which they 
subscribe.
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    \3\ See Securities Exchange Act Release No. 91963 (May 21, 
2021), 86 FR 28662 (May 27, 2021) (SR-EMERADL-2021-18 [sic]) (Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change to 
Adopt a New Historical Market Data Product To Be Known as the Open-
Close Report).
    \4\ The term ``Member'' means an individual or organization that 
is registered with the Exchange pursuant to Chapter II of these 
Rules for purposes of trading on the Exchange as an ``Electronic 
Exchange Member'' or ``Market Maker.'' Members are deemed 
``members'' under the Exchange Act. See Exchange Rule 100.
    \5\ See Securities Exchange Act Release No. 92138 (June 9, 
2021), 86 FR 31769 (June 15, 2021) (SR-EMERALD-2021-20) (Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To 
Amend the MIAX Pearl [sic] Options Fee Schedule To Adopt Fees for 
the Open-Close Report).
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General
    By way of background, the Exchange offers two versions of the Open-
Close Report, an end-of-day summary and intra-day report.\6\ The end-
of-day version is a volume summary of trading activity on the Exchange 
at the option level by origin (Priority Customer, Non-Priority 
Customer, Firm, Broker-Dealer, and Market Maker \7\), side of the 
market (buy or sell), contract volume, and transaction type (opening or 
closing). The customer and professional customer volume is further 
broken down into trade size buckets (less than 100 contracts, 100-199 
contracts, greater than 199 contracts). The Open-Close Data is 
proprietary Exchange trade data and does not include trade data from 
any other exchange. It is also a historical data product and not a 
real-time data feed.
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    \6\ The intraday Open-Close Report provides similar information 
to that of Open-Close Data but will be produced and updated every 10 
minutes during the trading day. Data is captured in ``snapshots'' 
taken every 10 minutes throughout the trading day and is available 
to subscribers within five minutes of the conclusion of each 10-
minute period.
    \7\ See Exchange Rule 100.
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    Members and non-Members may purchase the Open-Close Report on a 
monthly basis. The Exchange currently assess a monthly fee of $600 per 
month for subscribing to the end-of-day summary Open-Close Report and 
$2,000 per month for subscribing to the intra-day Open-Close Report. 
For mid-month subscriptions, new subscribers are currently charged for 
the full calendar month for which they subscribe and will be provided 
Open-Close Report data for each trading day of the calendar month from 
the day on which they subscribed.
End-of-Day Ad Hoc Request (Historical Data)
    The Exchange now proposes to provide Members and Non-Members who 
request on an ad hoc basis historical end-of-day Open-Close Report data 
free of charge.\8\ An ad hoc request may be for any number of months 
beginning with June 2021, the month in which the Exchange first made 
the Open-Close Report available. For example, as of the date of this 
filing, a market participant may request end-of-day Open-Close Report 
data for the month of June 2021 or July 2021, or may request such data 
for both June and July 2021 and would not be charged a fee for such 
request(s). The Exchange notes that other exchanges that provide 
similar data products allow for ad hoc requests of their end-of-day 
data for a fee \9\ and, like the Exchange proposes herein, allow for ad 
hoc requests back to a certain month.\10\
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    \8\ The Exchange does not propose to allow for ad hoc requests 
for intra-day Open-Close Report data.
    \9\ See Price List--U.S. Derivatives Data for Nasdaq PHLX, LLC 
(``PHLX''), The Nasdaq Stock Market, LLC (``Nasdaq''), Nasdaq ISE, 
LLC (``ISE''), and Nasdaq GEMX, LLC (``GEMX''), available at http://www.nasdaqtrader.com/Trader.aspx?id=DPPriceListOptions#web. 
Particularly, PHLX offers ``Nasdaq PHLX Options Trade Outline 
(PHOTO)'' and assesses $400 for historical end-of-day data; Nasdaq 
offers the ``Nasdaq Options Trade Outline (NOTO)'' and assesses $250 
for historical end-of-day data; ISE offers the ``Nasdaq ISE Open/
Close Trade Profile'' and assesses $600 per month for historical 
end-of-day data and $27,500 for complete history; and GEMX offers 
the ``Nasdaq GEMX Open/Close Trade Profile'' and assesses $400 for 
historical end-of-day data.
    Cboe EDGX Exchange, Inc. (``EDGX'') and Cboe BZX Exchange, Inc. 
(``BZX'') both assess $400 for historical end-of-day data per 
request per month. See the EDGX fee schedule available at http://markets.cboe.com/us/options/membership/fee_schedule/edgx/ and the 
BZX fee schedule available at http://markets.cboe.com/us/options/membership/fee_schedule/bzx/. Both EDGX and BZX allow for ad-hoc 
requests to be for any number of months beginning with January 2018 
for which the data is available.
    \10\ Both EDGX and BZX allow for ad-hoc requests to be for any 
number of months beginning with January 2018 for which the data is 
available. See the EDGX fee schedule available at http://markets.cboe.com/us/options/membership/fee_schedule/edgx/ and the 
BZX fee schedule available at http://markets.cboe.com/us/options/membership/fee_schedule/bzx/.
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    The Exchange also proposes to make the historical monthly data 
available fifteen (15) days after the end of the month for which it is 
requested. The Exchange proposes this delay because it is making 
historical end-of-day Open-Close Report data free of charge and seeks 
to not encourage subscribers to request historical end-of-day Open-
Close Report data over a paid subscription.
Mid-Month Subscriptions
    The Exchange also proposes to amend the data range of Open-Close 
Report data it provides to mid-month subscribers. As noted above, the 
Exchange currently charges new mid-month subscribers for the full 
calendar month for which they subscribe, but only provides Open-Close 
Report data for each trading day of the calendar month from the day on 
which they subscribed. The Exchange now proposes to provide new mid-
month subscribers data for each trading day of the calendar month prior 
to the day on which they subscribe. In other words, those that 
subscribe mid-month will be provided Open-Close Data retroactively for 
each trading day of the month in which they subscribed and 
prospectively for each trading day for the remainder of that calendar 
month pursuant to either the end-of-day or intra-day subscription they 
chose. This is identical to how the Exchange provides data to mid-month 
subscribers of the Exchange's Liquidity Taker Event report.\11\
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    \11\ See the Exchange's fee schedule available at https://www.miaxoptions.com/sites/default/files/fee_schedule-files/MIAX_Pearl_Options_Fee_Schedule_08122021.pdf [sic] (providing that 
``[n]ew subscribers will be charged for the full calendar month for 
which they subscribe and will be provided Liquidity Taker Event 
Report data for each trading day of the calendar month prior to the 
day on which they subscribed.'').
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Implementation Date
    The Exchange intends to provide historical Open-Close Report data 
for free pursuant this proposal immediately.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\12\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\13\ in particular, in that it 
is designed to prevent fraudulent and manipulative acts and practices, 
to

[[Page 52733]]

promote just and equitable principles of trade, to remove impediments 
to and perfect the mechanism of a free and open market and a national 
market system, and to protect investors and the public interest, and 
that it is not designed to permit unfair discrimination among 
customers, brokers, or dealers. The Exchange also believes that its 
proposed changes to its Fee Schedule concerning fees for the Open-Close 
Report is consistent with Section 6(b) of the Act \14\ in general, and 
furthers the objectives of Section 6(b)(4) of the Act \15\ in 
particular, in that it is an equitable allocation of dues, fees and 
other charges among its members and other recipients of Exchange data.
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    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(5).
    \14\ 15 U.S.C. 78f(b).
    \15\ 15 U.S.C. 78f(b)(4).
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    In adopting Regulation NMS, the Commission granted self-regulatory 
organizations (``SROs'') and broker-dealers increased authority and 
flexibility to offer new and unique market data to the public. It was 
believed that this authority would expand the amount of data available 
to consumers, and also spur innovation and competition for the 
provision of market data. Particularly, the Open-Close Report further 
broadens the availability of U.S. option market data to investors 
consistent with the principles of Regulation NMS. The data product also 
promotes increased transparency through the dissemination of the Open-
Close Report. Particularly, information regarding opening and closing 
activity across different option series during the trading day may 
indicate investor sentiment, which may allow market participants to 
make better informed trading decisions throughout the day. Subscribers 
to the data may also be able to enhance their ability to analyze option 
trade and volume data and create and test trading models and analytical 
strategies. The Exchange believes the Open-Close Report provides a 
valuable tool that subscribers can use to gain comprehensive insight 
into the trading activity in a particular series, but also emphasizes 
such data is not necessary for trading. Moreover, other exchanges offer 
a similar data product.\16\ This proposal simply and solely seeks to 
provide historical Open-Close Report data to market participants for 
free by amending the fees for the Open-Close Report to: (i) Respond to 
ad hoc requests for end-of-day data free of charge; and (ii) provide 
mid-month subscribers data for the entire month in which they 
subscribe.
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    \16\ See supra notes 9 and 10.
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    The Exchange operates in a highly competitive environment. Indeed, 
there are currently 16 registered options exchanges that trade options. 
Based on publicly available information, no single options exchange has 
more than 15% of the market share and currently the Exchange represents 
only approximately 5.54% of the market share.\17\ The Commission has 
repeatedly expressed its preference for competition over regulatory 
intervention in determining prices, products, and services in the 
securities markets. Particularly, in Regulation NMS, the Commission 
highlighted the importance of market forces in determining prices and 
SRO revenues and, also, recognized that current regulation of the 
market system ``has been remarkably successful in promoting market 
competition in its broader forms that are most important to investors 
and listed companies.'' \18\ Making similar data products available to 
market participants fosters competition in the marketplace, and 
constrains the ability of exchanges to charge supra-competitive fees. 
In the event that a market participant views one exchange's data 
product as more or less attractive than the competition they can and do 
switch between similar products. The proposed fees are a result of the 
competitive environment, as the Exchange seeks to adopt fees to attract 
purchasers of the recently introduced Open-Close Data product.
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    \17\ See the Exchange's ``The market at a glance'', available at 
https://www.miaxoptions.com/ (last visited September 1, 2021).
    \18\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting 
Release'').
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    The Exchange believes its proposal to provide Open-Close data in 
response to ad hoc request for end-of-day data free of charge is 
reasonable as the proposed rate is lower than the fees assessed by 
other exchanges that provide data in response to ad hoc request for 
their similar data products.\19\ In fact, the Exchange understands that 
no other exchange provides such data free of charge.\20\ Indeed, 
proposing fees that are excessively higher than established fees for 
similar data products would simply serve to reduce demand for the 
Exchange's data product, which as noted, is entirely optional. Like the 
Exchange's Open-Close Report, other exchanges offer similar data 
products that each provide insight into trading on those markets and 
may likewise aid in assessing investor sentiment. Although each of 
these similar Open-Close data products provide only proprietary trade 
data and not trade data from other exchanges, it is possible investors 
are still able to gauge overall investor sentiment across different 
option series based on open and closing interest on any one 
exchange.\21\ Similarly, market participants may be able to analyze 
option trade and volume data, and create and test trading models and 
analytical strategies using only Open-Close data relating to trading 
activity on one or more of the other markets that provide similar data 
products. As such, if a market participant views another exchange's 
Open-Close data as more attractive than its proposed Open-Close Report, 
then such market participant can merely choose not to subscribe to the 
Exchange's Open-Close Report and instead purchase another exchange's 
Open-Close data product, which offer similar data points, albeit based 
on that other market's trading activity.
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    \19\ See supra notes 9 and 10.
    \20\ See supra note 9.
    \21\ The exchange notes that its Open-Close Report data product 
does not include data on any exclusive, singly-listed option series.
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    The Exchange also believes its proposal to amend the fees for the 
Open-Close Report to: (i) Provide historical end-of-day data free of 
charge and (ii) provide mid-month subscribers data for the entire month 
in which they subscribe, is reasonable as it would further support its 
recent introduction of the Open-Close Report, which is designed to aid 
investors by providing insight into trading on the Exchange. Providing 
market data, such as the Open-Close Report, is also a means by which 
exchanges compete to attract business. Subscribers that receive end-of-
day Open-Close data for free in response to an ad hoc request may use 
such data to evaluate the usefulness of the Exchange's Open-Close 
Report and decide, based on that data, whether to subscribe to the 
Open-Close Report on a monthly basis. In addition, providing new mid-
month subscribers data for the entire calendar month would further 
enhance the value of the Open-Close Report and encourage mid-month 
subscriptions market participants that seek to subscribe to the Open-
Close Report not having to wait to the first of the next month to 
subscribe and receive a full month of Open-Close Report Data for the 
current monthly fee. To the extent that the Exchange is successful in 
attracting subscribers for the Open-Close Report through this proposal, 
it may earn trading revenues and further enhance the value of its data 
products. The Exchange also believes it proposal to make historical 
end-of-day Open-Close Report data on a delayed basis is a reasonable 
means to not encourage subscribers to request historical end-of-day 
Open-Close Report data over a paid subscription. If the market deems 
the proposal to be unfair or inequitable,

[[Page 52734]]

firms can diminish or discontinue their use of the data and/or avail 
themselves of similar products offered by other exchanges.\22\ The 
Exchange therefore believes that its proposal reflects the competitive 
environment and would be properly assessed on Member or non-Member 
users. The Exchange also believes the proposal is equitable and not 
unfairly discriminatory as it would apply equally to all users who 
choose to purchase or receive such data.
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    \22\ See supra notes 9 and 10.
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    As noted above, a wide variety of market participants to subscribe 
to the Open-Close Report, including but not limited to individual 
customers, buy-side investors and investment banks. The Exchange 
reiterates that the decision as to whether or not to subscribe to the 
Open-Close Report is entirely optional for all potential subscribers. 
Indeed, no market participant is required to subscribe to the Open-
Close Report, and the Exchange is not required to make the Open-Close 
Report available to all investors. Rather, the Exchange is voluntarily 
making additional Open-Close Report data available via ad hoc requests 
for end-of-day data and to mid-month subscribers under this proposal at 
the request of customers, and market participants may choose to receive 
this data based on their own business needs. Potential subscribe to or 
request the data at any time if they believe it to be valuable or may 
decline to subscribe such data.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. Rather, the 
Exchange believes that the proposal will promote competition by 
permitting the Exchange to enhance the value of a data product that is 
similar to those offered by other competitor options exchanges.\23\ The 
Exchange made Open-Close Data available in order to keep pace with 
changes in the industry and evolving customer needs, and believes the 
data product will continue to contribute to robust competition among 
national securities exchanges. At least eight other U.S. options 
exchanges offer a market data product that is substantially similar to 
the Open-Close Report. As a result, the Exchange believes this proposed 
rule change permits fair competition among national securities 
exchanges.
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    \23\ See supra note 9.
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    Furthermore, the Exchange operates in a highly competitive 
environment, and its ability to price the Open-Close Report is 
constrained by competition among exchanges that offer similar data 
products to their customers. As discussed, there are currently a number 
of similar products available to market participants and investors. At 
least eight other U.S. options exchanges offer a market data product 
that is substantially similar to the Open-Close Report, which the 
Exchange must consider in its pricing discipline in order to compete 
for the market data.\24\ For example, proposing fees that are 
excessively higher than established fees for similar data products 
would simply serve to reduce demand for the Exchange's data product, 
which as discussed, market participants are under no obligation to 
utilize. In this competitive environment, potential purchasers are free 
to choose which, if any, similar product to purchase to satisfy their 
need for market information. As a result, the Exchange believes this 
proposed rule change permits fair competition among national securities 
exchanges.
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    \24\ See, e.g., Cboe Options Fees Schedule, Livevol Fees, Open-
Close Data. See also Nasdaq ISE Options 7 Pricing Schedule, Section 
10.A and Nasdaq PHLX Options 7 Pricing Schedule, Section 10, PHLX 
Options Trade Outline (``PHOTO'').
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    The Exchange also does not believe the proposal would cause any 
unnecessary or inappropriate burden on intermarket competition as other 
exchanges are free to introduce their own comparable data product and 
lower their prices to better compete with the Exchange's offering. The 
Exchange does not believe the proposed rule change would cause any 
unnecessary or inappropriate burden on intramarket competition. 
Particularly, the proposal would apply uniformly to any market 
participant, in that it does not differentiate between subscribers to 
the Open-Close Report. The proposal is modest and would allow any 
interested Member or non-Member to subscribe to or request such data 
based on their business needs.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act,\25\ and Rule 19b-4(f)(2) \26\ thereunder. 
At any time within 60 days of the filing of the proposed rule change, 
the Commission summarily may temporarily suspend such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, or otherwise 
in furtherance of the purposes of the Act. If the Commission takes such 
action, the Commission shall institute proceedings to determine whether 
the proposed rule should be approved or disapproved.
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    \25\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \26\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-EMERALD-2021-28 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-EMERALD-2021-28. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (http://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments

[[Page 52735]]

received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions.
    You should submit only information that you wish to make available 
publicly. All submissions should refer to File Number SR-EMERALD-2021-
28 and should be submitted on or before October 13, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\27\
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    \27\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-20452 Filed 9-21-21; 8:45 am]
BILLING CODE 8011-01-P


